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United States v. Montoya

filed: January 12, 1995.


D.C. No. CR-92-0572-GT. D.C. No. CR-92-0572-GT. Gordon Thompson, Jr., District Judge, Presiding.

Before: Myron H. Bright,*fn* Charles Wiggins, and Thomas G. Nelson, Circuit Judges. Opinion by Judge T.g. Nelson; Dissent by Senior Circuit Judge Bright.

Author: Nelson

T.G. NELSON, Circuit Judge:



This case involves the prosecution of a formerly immunized witness and his wife. Filiberto Montoya is a real estate salesperson who was accused of laundering money for alien drug lords by making investments in local real estate. Montoya appeals his conviction following his conditional guilty plea to conspiracy to engage in monetary transactions in property derived from specified unlawful activity and to commit bank fraud, in violation of 18 U.S.C. §§ 371, 1957(a), and 1344. Rosario Montoya appeals her conviction following her conditional guilty plea to making a false statement on a loan application and aiding and abetting, in violation of 18 U.S.C. § 1014, 18 U.S.C. § 2. The Montoyas' conditional guilty pleas preserved the right to appeal the district court's denial of the motion to dismiss the indictment on the ground that this prosecution is allegedly tainted by Filiberto's status as an immunized witness in a drug investigation focusing on the Contreras-Subias drug organization. We conclude that the district court properly denied the motion to dismiss the indictment on the ground that it was not tainted by the earlier grant of immunity to Montoya; that a Kastigar evidentiary hearing was not compelled under the circumstances of this case; and that the district court did not err in refusing to dismiss the indictment on grounds that it was not the result of outrageous government conduct or prosecutorial vindictiveness.



In May 1988, the Government became aware that a number of real properties in San Diego County were connected with the Contreras-Subias drug trafficking organization. Assistant United States Attorney (AUSA) Warren Reese was assigned to investigate the trafficking activities of this organization (the "Reese investigation"). Early in the investigation, documents obtained as the result of the arrests of members of the Contreras-Subias organization and from searches of the San Diego properties, led to materials indicating that Filiberto Montoya was involved. Montoya had acted as a real estate salesperson in transactions whereby members of the organization, or its nominees, acquired real property. From May through August 1988, documents were collected as a result of the issuance of grand jury and administrative subpoenas.

A separate investigation revealed that Montoya was involved, on behalf of the Contreras family, in a real estate transaction in Oklahoma. This led to indictments of members of the drug organization for money laundering in Oklahoma, and AUSA Reese was assigned to assist in this prosecution.

In the Fall of 1988, Reese was contacted by an attorney on behalf of Montoya, and they discussed the possibility of Montoya cooperating in the investigation. Reese wrote a letter dated November 17, 1988, granting Montoya informal immunity. The first interview with Montoya took place on November 18, 1988. He was also interviewed in January, February, and May of 1989. Discussions with Montoya led Reese to conclude that Montoya would be called as a witness. Montoya was formally granted immunity and ordered to testify before the grand jury in San Diego in January 1989, and at the Oklahoma trial in May 1989.

In February 1990, Reese prepared a memorandum to the United States Attorney requesting that authority be sought from the Department of Justice to prosecute Montoya for conspiracy to commit bank and mail fraud and money laundering, as well as the substantive offenses. Reese's request explained:

In weighing the public interest in prosecution, it should be noted that the witness appeared to testify falsely before the grand jury, then recanted when confronted with contradictory evidence. He is also believed to have testified falsely during a trial (although a perjury prosecution could not be sustained), and he did not give complete testimony, as explained below.

Permission was ultimately granted by the Attorney General, and AUSA Amalia Meza, then AUSA Ed Weiner, were assigned to prosecute Montoya (the "Weiner investigation").*fn1 The Montoyas were indicted on May 7, 1992, for conspiracy to engage in money laundering and bank fraud, and for the underlying substantive offenses.

The Montoyas filed a motion to dismiss the indictment on the ground it was tainted by immunized testimony. The Government filed a response, including nine declarations of the various prosecutors and agents involved in the Reese and Weiner investigations. The Montoyas subsequently filed a motion to cross-examine the nine declarants after the court indicated that it might not hold a hearing on the motion (a Kastigar evidentiary hearing).

The district court denied the motion to dismiss the indictment and the motion to cross-examine on November 30, 1992. The court found that "the government, in its response and opposition, met its heavy burden of proof that it obtained the evidence used to indict Montoya from independent sources." The court concluded:

There was some overlap between the Reese investigation and the Weiner investigation, as the defense contends. However, the Government must prove that it had prior independent sources for the information that lead to Montoya's indictment, not that there was no overlap. The searches of Montoya's property in August of 1988, the subpoenas for records from escrow companies and financial institutions as a result of these searches, and the separate investigations of Agents Morris, Young and Grover all indicate that the Government had more than enough independent evidence to indict Montoya.

Instead of filing a motion for reconsideration, the Montoyas petitioned the Ninth Circuit for a writ of mandamus to compel the district court to vacate its order, conduct a hearing on the motion, including cross-examination of the nine declarants, and file discovery documents.*fn2 The Government filed a motion for reconsideration with the district court, requesting that it permit filing of the discovery material, review the material, and reconsider the motion to dismiss. The court granted the motion and reconsidered the motion to dismiss in light of the new material.

On February 2, 1993, the court again denied the motion to dismiss. The court noted that the discovery documents "actually support the Government's assertion that the evidence used to indict Montoya was derived from independent sources," and then described the documents. The court rejected the Montoyas' argument that the discovery documents were inconsistent with the declarations filed by the Government and that therefore an evidentiary hearing was required. The court explained:

The defendants point out that certain declarations state that the declarants did not have information about Montoya's immunized statements or testimony. But reports, by the declarants, make reference to the fact that the Government believed Montoya's testimony before the grand jury and in Oklahoma to be untruthful. The defense seems to argue that this means the declarant had knowledge of the contents of Montoya's statements and testimony. A closer reading of the reports, however, reveals that the declarants are just reiterating a generalized opinion that the Government believed Montoya lied to the grand jury. Nowhere in the voluminous documents submitted to the court are there implications that the declarants, which swore they had no knowledge of Montoya's statement or testimony, knew the content of Montoya's statements or testimony. Importantly, absent such a contradiction, there is no need for an evidentiary hearing.

The district court also denied a separate motion filed by the defendants, requesting that the court dismiss the indictment based on outrageous government conduct and vindictive prosecution, and requesting that an evidentiary hearing be held.

Subsequently, the Montoyas entered conditional guilty pleas,*fn3 preserving their right to appeal the court's denial of the motion to dismiss the indictment, "based on the contention that information obtained from Filiberto E. Montoya while he was an immunized witness in an earlier investigation so tainted the instant case as to require a dismissal." Filiberto Montoya was sentenced to forty-one months of incarceration and three years of supervised release. The court suspended Rosario Montoya's two-year sentence and placed her on three years of supervised probation. The Montoyas timely appeal. We have jurisdiction pursuant to 28 U.S.C. § 1291.



"We review under the clearly erroneous standard the district court's finding that the government's evidence was untainted by a grant of immunity." United States v. Lipkis, 770 F.2d 1447, 1450 (9th Cir. 1985). The district court's denial of a motion for an evidentiary hearing is reviewed for an abuse of discretion. See United States v. Navarro-Garcia, 926 F.2d 818, 822 (9th Cir. 1991). The standard of review for vindictive prosecution is unsettled in the Ninth Circuit. The court has variously applied abuse of discretion, clearly erroneous, and de novo standards. See United States v. Garza-Juarez, 992 F.2d 896, 903 (9th Cir. 1993), cert. denied, 114 S. Ct. 724 (1994). The district court's refusal to dismiss the indictments on the basis that the government's conduct was not outrageous is reviewed de novo. United States v. Solorio, 37 F.3d 454, 457 (9th Cir. 1994).



A. Immunized Testimony

The Montoyas argue that this prosecution is tainted because of improper use of Filiberto Montoya's immunized statements and testimony in violation of his Fifth Amendment right against self-incrimination.*fn4 See Kastigar v. United States, 406 U.S. 441, 32 L. Ed. 2d 212, 92 S. Ct. 1653 (1972). In Kastigar, the Supreme Court upheld the constitutionality of the federal witness use immunity statute, 18 U.S.C. § 6002, and held that a prosecution of a previously immunized witness is allowable, but emphasized that "the statute provides a sweeping proscription of any use, direct or indirect, of the compelled testimony and any information derived therefrom." Id. at 460; see also id. at 453.

The use immunity statute provides in relevant part that:

No testimony or other information compelled under the order (or any information directly or indirectly derived from such testimony or other information) may be used against the witness in any criminal case, except a prosecution for perjury, giving a false statement, or otherwise failing to comply with the order.

18 U.S.C. § 6002. The statute thus provides use and derivative use immunity, which "grants immunity from the use of the compelled testimony and evidence derived therefrom."*fn5 Block v. Consino, 535 F.2d 1165, 1167 n.3 (9th Cir.), cert. denied, 429 U.S. 861, 50 L. Ed. 2d 140, 97 S. Ct. 165 (1976). "Such immunity from use and derivative use is coextensive with the scope of the privilege against self-incrimination." Kastigar, 406 U.S. at 453. "The privilege has never been construed to mean that one who invokes it cannot subsequently be prosecuted." Id. "Use immunity does not protect the substance of compelled testimony, it only protects against the use of compulsory testimony as a source of evidence." United States v. Crowson, 828 F.2d 1427, 1428-29 (9th Cir. 1987) (internal quotation omitted), cert. denied, 488 U.S. 831, 102 L. Ed. 2d 63, 109 S. Ct. 87 (1988).

A person compelled to testify against himself under a grant of immunity need only show that he testified in order "to shift to the government 'the heavy burden' of proving an independent source for all its evidence." United States v. Mapelli, 971 F.2d 284, 288 (9th Cir. 1992) (citing Kastigar, 406 U.S. at 461). "This burden of proof . . . is not limited to a negation of taint; rather, it imposes on the prosecution the affirmative duty to prove that the evidence it proposes to use is derived from a legitimate source wholly independent of the compelled testimony." Kastigar, 406 U.S. at 461; see also United States v. Koon, 34 F.3d 1416, 1432 (9th Cir. 1994); Crowson, 828 F.2d at 1429. "[A] good faith allegation that the evidence is not the fruit of the immunized testimony is not sufficient; the Government must show how it acquired all of the evidence." Block, 535 F.2d at 1169. "The government must prove the independent source by a preponderance of the evidence, and we will uphold a district court's findings unless clearly erroneous. This court has permitted the government to meet its burden of proof as to the existence of independent, prior sources through affidavits." Crowson, 828 F.2d at 1429 (citation omitted).*fn6

"There is no per se rule requiring the withdrawal of a prosecutor or other government official who may have been exposed to immunized testimony." Id. at 1430; see also Mapelli, 971 F.2d at 287. If the prosecution team has been exposed to the immunized testimony, the Government may still use the evidence if it meets its burden of proof that the evidence is derived from independent sources. Crowson, 828 F.2d at 1430; Mapelli, 971 F.2d at 287-88. The question "is not whether the prosecutor was aware of the contents of the immunized testimony, but whether he used the testimony in any way to build a case against the defendant." Crowson, 828 F.2d at 1430 (internal quotation omitted). The Government may protect "against a claim of indirect use by assigning the case to others not exposed and barring communication between them and the prosecutors who obtained the compelled testimony." Mapelli, 971 F.2d at 288; see also Crowson, 828 F.2d at 1429-30.

1. Alleged evidentiary use of the immunized statements and testimony.

The district court found that the Government obtained the evidence used to indict Montoya from independent sources. Contrary to the Montoyas' portrayal of the district court's order, the district court did find there was some overlap between the Reese and the Weiner investigations. As the district court correctly observed, however, the Government is not required to show that there was no overlap, but that "all of the evidence it proposes to use was derived from legitimate independent sources." Kastigar, 406 U.S. at 461-62; see also Koon, 34 F.3d at 1432. Simply arguing that the investigations overlapped does not answer the question of the existence of legitimate independent sources for all of the evidence. Montoya's attack on the declarations of Agent Roman Chavez, Agent David Gauthier, and AUSA Reese therefore misses the mark. Even if agents and prosecutors actually participated in both investigations, and/or were exposed to immunized testimony, there is no per se rule requiring their withdrawal from the case. Crowson, 828 F.2d at 1430. The focus ...

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